Brent crude futures rose $1.62, or 1.8%, to $91.49 a barrel at 0148, while markets also braced for Chinese GDP data. West Texas Intermediate Crude (WTI) futures rose $1.77, or 2%, to $88.43 a barrel.
U.S. crude inventories fell by about 4.4 million barrels in the week ended Oct. 13, according to market sources citing figures from the American Petroleum Institute on Tuesday. That was much steeper than the 300,000 barrel drawdown that analysts had forecast.
Officially US government data will follow later on Wednesday.
Tensions in the Middle East escalated after about 500 Palestinians were killed Tuesday in an explosion at a Gaza city hospital that Israeli and Palestinian officials blamed on each other.
US President Joe Biden will visit Israel on Wednesday to show support for the country in its war with the Palestinian Islamic Jihad militant group Hamas. The White House said he will make it clear he does not want the conflict to spread.
On the demand side, China’s economy is likely to have slowed in the third quarter, data is expected to show on Wednesday, pressured by continued weak demand, although increased stimulus has improved prospects that Beijing could meet its full-year growth target .
Meanwhile, US retail sales rose more than expected in September, raising expectations of another Federal Reserve rate hike by the end of the year. Raising interest rates to curb inflation could slow economic growth and reduce demand for oil.
The Venezuelan government and its political opposition on Tuesday agreed to electoral guarantees for the 2024 presidential elections, paving the way for possible relief from US sanctions that could boost oil supplies.
The US has imposed sanctions on oil exports from Venezuela since 2019 and while sanctions relief is expected to boost oil supplies, analysts expect any increases from the country will take time due to a lack of investment.